What Is Reverse Mortgage?
Seniors often have substantial equity in the home after years of making mortgage payments and may have no mortgage at all. Yet, because of low fixed income, may have difficulty qualifying for a cash out refinance, second mortgage, or equity line of credit. The reverse mortgage is unique in the sense that it can both eliminate your current mortgage payment, pay off your debt and the loan does not need to be repaid.
Borrowers generally do not have to provide income verification or other typical loan requirements. You are able to remain in the home until you die, sell the home, or no longer use the home as your primary residence.
- Cash Advances Are Tax Free.
- You Retain Title To Your Home And May Remain In The Home The Rest Of Your Life.
- Not Required To Pay Back The Loan.
- Can Arrange For Monthly Payments To Cover Ongoing Expenses.
- Easy To Qualify With No Income Restrictions.
- Loan Paid Off When The Home Is Sold, Additional Equity Goes To Heirs.
- High Upfront Fees And Ongoing Servicing Fees.
- Must Have Large Amount Of Equity To Qualify.
- Amount Owed Will Grow As The Interest Is Added To The Loan bBalance.
- Most Have Variable Interest Rate Which May Result In A Higher Rate Over Time.
- Required To Pay Property Taxes, Insurance And Maintain The Home.